The Chips Alliance is backfiring so badly that the USA
now realises, and Taiwan, Japan and South Korea now know for a fact that
it is going to lead to their own economic suicide. Having been mislaid
by the USA to build chip plants in Arizona, they are like animals being
led to the slaughter house, with them remaining innocently unaware of
what awaits them. Now, TSMC found out the fakery the hard way, but it is
too late to reverse after having sunk US$40 billion into those
projects.
The USA is now trying to play reverse psychology with
the Chinese by feigning their willingness to allow companies to sell
some formerly banned chips to China, predictably not the top end chips,
in the hope that China will pull back in its resolve to be highly self
reliant, and hoping that China would turn around looking towards USA
chipmakers instead of delving and fast tracking its research and
development in high end chips. China is not going to fall into this
trap, having learnt a very hard lesson of survival against all odds.
The
USA and the Chip Alliance members know that if China persist in its
resolve, well aware that what does not kill China will make it stronger,
that realisation is going to kill off many top foreign chip
manufacturerers, with domestically chip producers now taking over the
market in China, which will eventually leave them out in the cold. In
time, Chinese equipment makers will be highly reliant on domestically
produced chips instead of imported ones. The alliance probably saw the
edge of the cliff they were heading towards and is using the USA to use
fake relaxation of chip sanctions against China to slow the Chinese chip
development priority.
Anonymous
4 comments:
China today cannot afford to take chances with reliance on the USA, the West, even Japan or South Korea. The hard lessons for China had been learnt. Once bitten twice shy.
China must try to be self reliant as much as possible. In my humble opinion, if the West wants to do business with China by all means. If the West wants to de-couple or de-link so be it. China cannot do much about that.
All that talk about China collapsing, or its export sector suffering so badly is not going to push China under, with just rhetorics alone. China is attempting to promote an economy based largely, though not possibly totally, on domestic demand. With a population of 1.4 billion, this is a feasible option though there are pros and cons and prices to pay.
Chinese nationals are reported to be travelling less overseas post COVID, and this would be a chance for the Chinese Government to promote domestic travel to provide a boost for China's economy if they were to travel inside China itself, spending their money at home. China is such a vast country for travellers, full of interesting places to visit, that even foreigners are astounded. Moreover, with all the high speed rail links transversing all over the country, travelling is so easy, fast and comfortable.
China can still do relatively well in trade with Russia, Iran, ASEAN and the BRICS member countries, even if the USA and the Anglo Saxon White clique were to close ranks to sabotage and strangle China's export foray. Sure, there will be detrimental issues, but nothing that China cannot handle with five thousand years of history behind its existence in coping with all kinds of setbacks and disasters. In the process, China has indeed grown stronger.
China just issued a ban on Chinese government officials from using iphones and other foreign made devices, quoting National Security Issues. National Security Issue is now such a useful term for China to use, thanks to the USA for inventing it. How widely will this ban spread is left to be seen. China accounts for 20% of the global iphone market for Apple and is not to be sniffed at.
This is widely seen as a retaliation against the USA for its ban on Huawei, coming not a second too early, I suppose. Chinese phonemakers like Huawei, Vivo, Xiaomi and others now have the confidence to take over the Chinese market, with the Chinese population now migrating widely to phones made by Chinese companies. When the expression of a little wave of dissent becomes a tsunami, it will be interesting to see how Apple is going to fare in China.
With chipmakers already grappling with eventual cut off from the Chinese market, and Apple facing the unpalatable situation in China evolving, TSMC, the biggest supplier of high end chips to Apple is not going to find the going comfortable as well. China is adding insult to injury to beleaguered TSMC, which had already been dealt a blindsided fatal blow by the USA over its setting up of a chips foundry in Arizona.
We can see how China's calculated retaliation can lead to detrimental effects for even those further down the supply chain. China's retaliation is all encumbering, offering little escape even for those not directly affected, just like its restriction of rare earth exports. Not only does it affect chip manufacturers, but is affecting the military establishment, EV makers, phone makers and most equipment and consumer electronic makers. China controls the supply and market, and can dictate what no others have the luxury of doing. China still has a lot of other cards to play with.
Apple is benefiting from China's market and efficient labour and lower cost of production. China would have long ban sales of iPhones in China if not because of Foxconn making and assembling iPhones. Once Apple cuts off production in China, there will be no reason for China to stop Apple sales in China.
Apple then would lost the China market and China factories and supply chain. Apple can go to India if it thinks that is a better choice.
Apple sales in China is not ranked among the top three, behind three other Chinese phone makers, Vivo, Oppo and Xiaomi, according to some sources. At about 15.5% of the Chinese market share, that accounts for 20% of Apple's revenue in all iphone sales worldwide.
From this, we can see the size of the Chinese market and why it is such a highly prized market for every conceivable Western company. Losing it is a very painful price to pay.
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